Monthly Decision Maker Panel data - November 2023

The Decision Maker Panel (DMP) is a survey of Chief Financial Officers from small, medium and large UK businesses. We use it to monitor developments in the economy and to track businesses’ views.
Published on 30 November 2023

The November DMP survey was conducted between 3 and 17 November and received 2,428 responses.

Firms reported that their output prices rose by an average annual rate of 6.6% in the three months to November, 0.5 percentage points lower than reported in the three months to October. The single month data for November fell to 6.0%, 0.8 percentage points lower than in October. Note that the DMP covers own prices from firms across the whole economy, not just consumer-facing firms.

Looking ahead, businesses expect their output price inflation to decline over the next year. Year-ahead own-price inflation was expected to be 4.4% in the three months to November, down from 4.5% in the three months to October. Expected output price inflation has been gradually falling over the year.

One-year ahead CPI inflation expectations decreased to 4.4% in November, down from 4.6% in October. The three-month moving average fell by 0.2 percentage points to 4.6% in the three months to November. Three-year ahead CPI inflation expectations increased 0.1 percentage point to 3.2% in November. Current perceived CPI inflation was 6.3% in November (down from 6.9% in October). The latest ONS release on 15 November (towards the end of the DMP survey window) showed that annual CPI inflation declined from 6.7% in the previous month to 4.6%.

Expected year-ahead wage growth remained unchanged at 5.1%, both on a single-month and a three-month moving average basis. Expected year-ahead wage growth was lower than realised wage growth, which stood at 7.0% in the single-month data and in the three months to November.

Uncertainty was increased in November. Of those surveyed, 53% of firms reported that the overall level of uncertainty facing their business was high or very high, marginally higher than 50% in October. Sales growth uncertainty increased on a single-month and three-month moving average basis.

Firms reported that the average interest rate that they were paying on their borrowing (both bank and market based) was 6.6%, 0.1 percentage points lower than reported in October. Over the next year firms expect the average interest rate on their borrowing to decline modestly to 6.2%, but still significantly higher than the interest rate of 3.4% that firms had previously reported paying at the end of 2021.

Given the finding that firms expect future interest rates to remain close to their current level, the DMP asked firms about the current and future impact of the 2021 interest rate increases on employment, investment and sales. Firms reported that in Q3 2023, the average impact of changes in interest rates had so far led to a 1.3% decrease in employment, 8.4% decrease in capital expenditure, and a 4.6% decrease in sales. By Q3 2024, firms expected employment to be 2.3% lower as a result of interest rate increases, they also reported expecting capital expenditure to be 10.4% lower and sales to be 4.7% lower due to changes in interest rates.

The DMP was set up in August 2016 by the Bank of England together with academics from Stanford University and the University of Nottingham. It was designed to be representative of the population of UK businesses. All results are weighted. See Bloom et al (2017) for more details.

The DMP receives funding from the Economic and Social Research Council.